Busted! Don’t Believe These Myths About Government Loans!
Canada Emergency Business Account (CEBA) is one of the Government of Canada’s financial relief measures to support businesses impacted by the coronavirus pandemic. Eligible businesses can get access to this interest-free loan to help them manage their expenses. Moreover, with the latest news release, CEBA will be available to businesses that have been operating out of a non-business banking account.
However, there are certain prominent myths and misinformation surrounding the government loan that isn’t true. Believing in these misconceptions could dissuade your business from receiving financial benefits. To help you separate facts from fiction and understand about Canada Emergency Business Account (CEBA), Can-Am CPA Professional Corporation has debunked two of the most widely believed myths about government loans.
Myth 1: CEBA (Canada Emergency Business Account) is free!
The $60,000 federal government CEBA loan is not free. It’s a loan! There is a forgivable portion of $20,000 that does not need to be repaid; however, this portion is taxable.
Myth 2: The CEBA loan is only for those with payroll
This is false! There is an expense stream for those businesses that do not meet the payroll requirement. Businesses that have $40,000 of expense and above can be eligible to apply for the CEBA Loan.
Take note that your bank administers the CEBA loan. As such, the repayment and interest rate of the CEBA Loan (which starts January 2023) is a bank loan. If you do not repay according to the repayment agreement, your credit will be negatively affected.
If you’re looking to steer clear of these myths, reach out to Can-Am CPA Professional Corporation. We are a full-service accounting firm in Weston, Toronto, that has been providing premium tax and accounting services since 1975. We offer help to small businesses and individuals navigate through the complex rules, laws, and policies of the Canadian taxation system. Our services include accounting, tax preparations, tax planning, payroll services, and bookkeeping, and it is extended to clients across Toronto, Pickering, Ajax, Mississauga, Brampton, Vaughan, Woodridge, and the surrounding areas.
For a complete list of our services, please click here. If you have any questions about taxation, we’d love to hear from you, please contact us here.